India's economic growth jumps to 7.7%

India's economic growth jumps to 7.7%

India's economic growth jumps to 7.7%

NEW DELHI, May 31 (Reuters) - The Indian economy grew 7.7 percent year-on-year in January-March, its quickest pace in almost two years driven by higher growth in manufacturing, the farm sector and construction. While 2017-18 recorded the slowest growth in four years of the Modi government, a virtuous cycle of investment and consumption can once again make consistent 8 per cent growth a reality.

The significant expansion in GDP print has sprung a positive surprise by notching up an impressive growth of 7.7 per cent in the fourth quarter of 2017-18 and "marginally overshoots the advance estimates of GDP released earlier this year", said CII Director General Chandrajit Banerjee. Rapid growth in agriculture (4.5 percent), manufacturing (9.1 percent) and construction sectors (11.5 percent) contributed to the overall growth.

Encouraged by the quarterly surge, the government on Thursday said it is keeping its forecast of GDP growth of 7.5 per cent for fiscal year 2018-19 unchanged.

It said that Indias growth scenario is set to improve further going ahead and the GDP is expected to grow at 7.5 per cent in the current fiscal.

"Worrying trend is lowest core GVA (gross value added) growth (GVA excluding agriculture and public administration, defense and other services), it grew only 6.5 per cent in FY18 (previous low: 6.6 per cent in 2013-14)".

However, services sectors such as trade, hotels, transport (6.8%) and financial services (5%) decelerated from their levels in the third quarter, signaling a lingering impact from disruptions caused by hasty implementation of the goods and services tax (GST) as well as the state of the banking sector.

The financing, real estate and insurance sector's growth lower at 5 percent against 6.9 percent in December 2017.

To help businesses tide over multiple taxation, his government launched a nation-wide goods and services tax but a botched implementation of the GST almost scuttled the country's growth prospects in the near term. The GVA growth was 7.1 per cent in 2016-17.

In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during 2017-18 are estimated at 28.5 per cent and 31.4 per cent, respectively, as against the corresponding rates of 28.5 per cent and 31.1 per cent, respectively, in 2016-17.

In a tweet, Mr Goyal said, this shows that the economy is on the right track and set for even higher growth in the future.

Replying to a query, the Secretary said, oil pricing policy needs to be looked at if prices are elevated.

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